New Rally High

The cash S&P500 reached a new rally high on an up trending price bar Wednesday. It continues to be prudent to wait for more definitive proof that a top is in before acting on the active sequential “sell” signal. The stop level with that signal is at 1121.95. The most conservative action continues to be to wait for confirmation of a sell-off which now means a break below the 1069.30 level, which is just above where the medium (blue) moving average will be today.

With a new high made and the Level 1 price pulses showing the trend as up, when will I give up this topping notion? If the stop is violated or perhaps if we reach nine consecutive positive setup days. Yesterday was setup day five. On the flip side … if the RSI turns down here we will get a “sell“ signal with that indicator. If we get another up trending day with a higher close we will see a TD Combo “sell“ generated.

Bottom Line: No change. I have been neutral since October 9th and remain that way now while waiting for resolution of the Sequential signal. Hopeful equity bears should note that the pending Sequential “buy” on the dollar index is in danger of being extinguished if we get consecutive down setup days today and Friday - that would help the equity bullish case.